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PROPERTY

German property prices rise at highest rate in two decades

The cost of buying a home has jumped significantly in the past year in Germany, with major cities and rural areas seeing the biggest rise in prices.

Published: 28 March 2022 13:10 CEST
Property prices German
A row of houses in Munster, Germany. Photo: picture alliance/dpa/LBS West | LBS West

According to the latest data from the Federal Office of Statistics (Destatis), residential property prices in Germany rose by an average of 12.2 percent between the final quarter of 2020 and the final quarter of 2021. 

This is the biggest price increase in residential property prices in more than two decades.

It followed two previous quarters of strong growth, with prices springing up by 12 percent in Q3 and by 10.8 percent in Q2 compared to the previous year’s figures. From Q3 to Q4, property prices went up by just over three percent on average in Germany.

In the annual average for 2021, prices for residential property in Germany rose by 11 percent overall compared to 2020 – almost double the average growth of 7.8 percent in 2020. 

The latest statistics suggest that Germany is seeing a renewed boom in its housing market after the pandemic, which could reflect the low interest rates on mortgages and the impetus to invest savings in property to prevent them being eroded by inflation.

READ ALSO: EXPLAINED: The hidden costs of buying a house in Germany

Rural areas see highest growth

With a culture of remote working taking hold in Germany since the pandemic struck in 2020, prices in rural areas showed the strongest growth of all last year.

According to Destatis, the cost of buying a detached or semi-detached house in less populated rural regions rose by 15.9 percent against the previous year, while flat prices went up 13.2 percent. In more densely populated rural districts, prices for detached and semi-detached houses rose by 14.5 percent and prices for condominiums went up by 11.2 percent.

This trend could continue as more and more people consider swapping their urban lifestyle for a gentler pace of life in the countryside.

Average property price increases

Average annual price increases in the German property market from 2000-2021. Source: Destatis

A recent survey by property search portal ImmoScout24 revealed that two-thirds of Germans had thought about moving to the country in the past few years, with most attracted by the idea of being close to nature and being able to have their own garden. 

Since the start of the pandemic, demand for family homes out in nature has gone up by 30 percent, ImmoScout24 revealed. The demand was particularly strong in the green belt areas around Berlin and Hamburg. 

Significant price hikes in major cities

In a reflection of the fiercely competitive rental market, property prices in Germany’s seven major metropoles also rose steeply in 2021. 

Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf all saw above-average price increases in Q4, with prices for detached and semi-detached houses rising by 12.8 percent and prices for flats by 12.7 percent year-on-year.

A small consolation for potential big-city buyers: the price hikes in the metropoles appear to be tapering off a bit.

Between the third and fourth quarter, prices for detached and semi-detached houses in metropolitan areas rose by 1.4 percent, while flat prices rose by just 0.7 percent. This is a marked change to the rate of growth just a quarter earlier, when prices for houses jumped by 3.5 percent and prices for flats had jumped by 3.8 percent compared to Q2. 

Currently, according to property portal Immowelt, houses in Germany cost an average of around €2,800 per square metre, while flats cost an average of around €3,200 per square metre, though there are strong regional differences.

Saxony, for example, remains a highly affordable place to buy a starter home, while in Bavaria and its capital, Munich, buyers can expect some of the highest property prices in the country. 

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LIVING IN GERMANY

Inside Germany: Boozy public holidays, bilingual kids and the countdown to Euro 2024

From public holidays to getting ready for Euro 2024 and how to help children grow up in a bilingual household, here's what we're talking about in Germany this week.

Published: 4 May 2024 08:19 CEST
Inside Germany: Boozy public holidays, bilingual kids and the countdown to Euro 2024

Inside Germany is our weekly look at some of the news, talking points and gossip in Germany that you might not have heard about. It’s published each Saturday and members can receive it directly to their inbox by going to their newsletter preferences or adding their email to the sign-up box in this article.

A good year for public holidays (especially May) 

After the long and dark winter in Germany, it’s a relief to see more daylight and even some sun. And when spring rolls around, there’s another nice perk of living in Germany – public holidays. This season is when you get to relax, not work as much and enjoy being outside. At the end of March, we had a couple of days off for Easter and in May there are several Feiertage. 

We kicked off the month with International Workers’ Day or Labour Day, known as Tag der Arbeit in Germany. Luckily, the weather was pleasant and warm across the country as people attended demonstrations, May Day parades or relaxed in the sun. I took a turn to see the festivities in Berlin’s Kreuzberg area – a traditional spot for Tag der Arbeit gatherings – in the afternoon but was quickly stressed out by the crowds. I don’t know if the sun had gone to everyone’s head but it did seem like people were drinking more this year than usual. 

Next Thursday, May 9th, is Ascension Day (Christi Himmelfahrt) which is also a public holiday. Of course this is also Fathers’ Day or Vatertag in Germany. It’s another one where you are likely to run into a lot of drunk people. It has always amused me that it’s a tradition for men to fill a cart with booze and go hiking with their drinks in the afternoon. Next up on Monday May 20th is Whit Monday (Pfingstmontag) which is another Feiertag – but maybe will be less boozy than the others. Lastly, there’s a regional holiday on Thursday May 30th for Corpus Christi (Fronleichnam) – but it’s not nationwide. 

It’s safe to say that it’s a pretty good year for public holidays in Germany since most don’t fall on the weekend. As long-time readers of The Local will know, one of my biggest bugbears about living in Germany is that we lose a holiday if the event does not fall on a week day. But never mind the holidays, who has channelled their inner German and already booked their ‘bridge days’ off?

READ ALSO: Bridge days – how to maximise your public holiday like a German 

Countdown on for the Euros in Germany

June is a busy month in Germany. Not only is the new citizenship law coming into force (on June 26th!), but the UEFA European Football Championship or Euro 2024 kicks off. A total of 24 teams are gearing up to compete in the tournament, which takes place from June 14th to July 14th. Over 22 match days, a total of 51 games will be played.

It’s quite a special occasion for me because Germany’s national team is taking on Scotland in the very first game in Munich – and I am Scottish! I’m excited for my fellow country men and women to pop over from the island (although I do hope everyone is on their best behaviour). 

A view of Group A for Euro 2024.

A view of Group A in the Euro 2024 tournament. Photo: picture alliance/dpa | Christian Charisius

Although I’m not a huge football fan, I do enjoy these big tournaments and the atmosphere in Germany is always fantastic. It’s usually very inclusive with screenings set up in beer gardens and even outside off-licences or Spätis as they are called in Berlin. People tend to let their guards down, mingle with strangers and enjoy the beautiful game. Of course I will be hoping that Scotland win. Who are you rooting for in the tournament?

READ ALSO: Euro 2024 – What can you expect in Germany during Europe’s biggest football frenzy?

Tips on bringing up bilingual children 

I was delighted to hear from readers about their experiences of helping raise their children in a bilingual or even multilingual environment. 

Many of the respondents to our recent survey said that parents should have trust in the German education system – and stick to their native tongue at home. 

Siniša, 44, from Hesse, who speaks Croatian and English at home, said: “Speak your native language at home. The school will ‘cover’ German and other languages.”

Steve, 55, who lives in Munich and speaks English and Spanish with his daughter, added: “Be consistent and raise your child in your native tongue. At a local school, they will learn German quickly.”

“For international parents, I think it’s very important that their children do not lose touch with their mother tongue, as it is a very special part of their identity,” said Prashanth, 42, who lives in Munich.

Read our full story for more, and don’t forget to listen to our Germany in Focus podcast where we hear from The Local Germany’s former editor Rachel Stern talk about her experience of raising her daughter Amelie, who is almost three-years-old, in a bilingual home. 

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